DC Circuit Rules White House CEQ Lacks Authority to Issue Binding NEPA Regulations

Separation of Powers
Created by NEPA in 1969, CEQ is a division of the Executive Office of the President. CEQ’s main responsibilities are to (1) advise the President on environmental policy issues, and (2) implement the requirements of NEPA.

The Court explained that the longstanding regulations promulgated by CEQ violate the constitutional principle of separation of powers. The Court reasoned that the CEQ regulations arise from Executive Orders of the President, and thus cannot bind federal agencies because the President cannot lawfully assume lawmaking powers without congressional authority.

The Court noted that Article II § 3 of the U.S. Constitution, which confers power in the President to take care that the laws are faithfully executed, does not confer rulemaking authority because “[t]he CEQ regulations are by no means a mere delegation of the President’s authority under the Take Care Clause.”

Far-Reaching Implications
The implications of the Marin Audubon Society decision reach well beyond the case at issue and could affect any federal agency NEPA actions that purport to follow the CEQ regulations rather than the agency’s own NEPA-implementing regulations. CEQ has long-standing NEPA implementation regulations, but has been particularly active during the recent administrations, issuing regulations regarding environmental justice, climate change, clean energy permitting, and more. Only the agency management plan at issue in the litigation would be set aside by the ruling, but the precedent set by the decision (if the decision stands) could threaten a wide range of federal agency actions.

The Court also addressed whether federal agencies are permitted to incorporate the CEQ regulations by reference into their own NEPA implementing regulations. The Court said agencies cannot, because the “agencies could not have adopted a body of rules that did not exist at the time. Even if that were possible, nothing in the [Department of the Interior or Department of Transportation] rules evinced an intent to automatically incorporate every new iteration of the CEQ regulations.” Furthermore, questions about agency compliance with the Administrative Procedure Act’s notice and comment procedures in the event of an agency incorporating CEQ regulations by reference are left unanswered.

More generally, the decision signals continued willingness by federal courts to closely scrutinize claims of rulemaking authority by federal agencies. Citing the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), which ended Chevron deference, the Court stated that CEQ’s NEPA regulations are not “entitled to substantial deference” as had been suggested in earlier cases.

Looking Ahead
Given the nature of the parties in the Marin Audubon Society case—two federal agencies and environmental organizations—it is likely that one or more parties will seek further judicial review of the decision. The three-judge panel that heard the case ruled 2-1 to invalidate CEQ’s rulemaking authority, with Chief Judge Sri Srinivasan dissenting in part, arguing that there was no cause for the majority to reach the separation of powers holding, as it was beyond the scope of the parties’ arguments.

Assuming no extensions, the deadline for a party to seek rehearing is December 27, 2024, and the deadline for a party to seek a writ of certiorari from the Supreme Court is February 10, 2025.

Pillsbury attorneys will continue to monitor the consequences of this decision both in the environmental law arena and as they spread to other agencies and subject matters.